EC opens investigation into dotcom contract

ICANN put under anti-trust eye

The European Commission has opened an investigation into the new dotcom contract following a formal complaint by a lobbying group calling itself the Coalition for ICANN Transparency (CFIT).

According to CFIT, the proposed contract drawn up between internet-overseeing organisation ICANN and registrar VeriSign breaches EU competition laws. It will have "significant anti-competitive effects in markets for domain name registration and for related Internet services which depend on these domain registrations," CFIT argues in the letter to the EC's Competition Directorate.

In particular, CFIT claims, it breaches Articles 81 and 82 of the EC Treaty which prohibit agreements that reduce consumer welfare by providing the ability to raise prices, reduce choice or undermine innovation.

The letter follows lawsuits lodged in California earlier this week that claim the contract also breaks US anti-trust laws.

Changes in the proposed contract will see VeriSign handed effective control of the dotcom registry in perpetuity. VeriSign will also be entitled to increase what it charges for domains by seven percent a year.

ICANN's response so far has been to dismiss the legal threats as an attempt to influence the public comment process that the contract is currently going through at its meeting here in Vancouver. ICANN general counsel John Jeffrey also told us that it did not consider the lawsuits as legitimate public comment.

That response was supported in part by Ross Rader of registrar Tucows, one of the most outspoken critics of the new contract. He told a meeting in Vancouver on Thursday that he was "not completely supportive" of the litigation.

However, there is no denying that the CFIT's professional lobbying effort is having an impact both on delegates and the wider internet community. What remains unanswered is who precisely is funding CFIT. For a body that even includes transparency in its name, CFIT remains suspiciously opaque.

Our rough estimation is that it has already spent $200,000 on the lobbying effort so far, and it shows no signs of stopping. And yet the only contributor to come forward, Pool.com, simply does not have the resources to fund the whole effort. Its CEO, Tony Farrow, also confirmed to us that the company had put nowhere near our estimated figure into the organisation. ®